2011-2012 Bill 387: Alternate Local Option Tourism Development Fee Act - South Carolina

South Carolina General Assembly

119th Session, 2011-2012

S.387

STATUS INFORMATION

General Bill

Sponsors: Senator Pinckney

Document Path: l:\council\bills\nbd\11116dg11.docx

Introduced in the Senate on January 19, 2011

Currently residing in the Senate Committee on Finance

Summary: Alternate Local Option Tourism Development Fee Act

HISTORY OF LEGISLATIVE ACTIONS

DateBodyAction Description with journal page number

1/19/2011SenateIntroduced and read first time (Senate Journalpage3)

1/19/2011SenateReferred to Committee on Finance(Senate Journalpage3)

VERSIONS OF THIS BILL

1/19/2011

ABILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 10 TO CHAPTER 10, TITLE 4 SO AS TO ENACT THE “LOCAL OPTION EXTRAORDINARY COMMERCIAL FACILITIES FEE ACT”, TO DEFINE NECESSARY TERMS, TO SPECIFY WHICH STORMWATER ORDINANCES APPLY, TO PROVIDE THAT A MUNICIPALITY MAY IMPOSE A FEE NOT TO EXCEED TWO PERCENT ON RETAILERS WITHIN A DESIGNATED ECONOMIC DEVELOPMENT SITE, TO PROVIDE THAT THE REVENUE FROM THE FEE SHALL BE USED TO OFFSET INFRASTRUCTURE COSTS, TO PROVIDE THE MANNER IN WHICH THE FEE MAY BE IMPOSED, TO PROVIDE THE MANNER IN WHICH THE FEE SHALL BE COLLECTED; AND BY ADDING ARTICLE 11 TO CHAPTER 10, TITLE 4 SO AS TO ENACT THE “ALTERNATE LOCAL OPTION TOURISM DEVELOPMENT FEE ACT”, TO DEFINE NECESSARY TERMS, TO PROVIDE THAT A MUNICIPALITY MAY IMPOSE A FEE NOT TO EXCEED ONE PERCENT FOR TOURISM ADVERTISEMENT AND PROMOTION DIRECTED AT NONSOUTH CAROLINA RESIDENTS, AND TO PROVIDE THE MANNER IN WHICH THE FEE MAY BE IMPOSED.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION1.Chapter 10, Title 4 of the 1976 Code is amended by adding:

“Article 10

Local Option Extraordinary Commercial Facilities Fee

Section 4101010.This article may be cited as the ‘Local Option Extraordinary Commercial Facilities Fee Act’.

Section 4101020.For purposes of this article:

(1)‘Designated economic development site’ means a geographic area which has been designated as a multicounty park pursuant Section 13,Article VIII of the South Carolina Constitution, 1895, and Section 41170, which meets the following qualifying criteria: (i) the amount of new capital investment within the site is not less than an aggregate amount of one hundred million dollars; and (ii) the aggregate number of new fulltime jobs within the site is not less than one thousand two hundred fifty that are maintained for at least one year. After the first year of maintaining one thousand two hundred fifty new fulltime jobs, the site must maintain at least six hundred twentyfive fulltime jobs for each year thereafter. The number of new jobs may be based on a quarterly report filed with the South Carolina Department of Employment and Workforce or the United States Bureau of Labor Statistics; except that a certificate based on those reports need not include copies of the reports so as to ensure the maintenance of privacy of information in the reports. The municipality making a designation of a designated economic development site shall notify the South Carolina Department of Revenue of the boundaries of the designated economic development site.

(2)‘Fee’ means the local option extraordinary commercial facilities fee allowed to be imposed as provided in this article.

(3)‘Infrastructure’ means:

(a)water and sewer projects and road construction and improvement projects. These projects include: planning, engineering, rights ofway, drainage, curb and gutter, parking lots, parking lot lighting, flashing lights or signals, gates at crossway, resurfacing or widening, turn lanes, and acceleration lanes;

(b)fiberoptic cable;

(c)rail spurs; and

(d)site preparation, which includes surveying, environmental and geotechnical study and mitigation, clearing, filling, and grading.

‘Infrastructure’ does not include buildings, fixtures, land acquisition, or other similar items.

‘Infrastructure’ includes only those projects for which costs were incurred after the initial identification of a site as a proposed designated economic development site.

(4)‘Municipality’ means a municipal corporation created pursuant to Chapter 1, Title 5 or a municipal government as the use of the term dictates, located in a county as defined by subsection (1).

(5)‘New capital investment’ means private capital investment within the designated economic development site by the owners of the properties which comprise the site which is incurred after the initial identification of the site as a proposed designated economic development site. New capital investment shall not include any costs incurred for the acquisition of land comprising the designated economic development site.

(6)‘New job’ means a new fulltime job created in this State at the time a new facility is initially staffed.

Section 4101025.(A)If the designated economic development site is located in jurisdictions with separate and distinct stormwater ordinances, the standards and controls of the most stringent ordinance apply in the entire site. Similarly, if the site is within a single jurisdiction for purposes of a stormwater ordinance and stormwater from the site is discharged into watercourses in adjoining jurisdictions, the most stringent stormwater ordinance of the adjoining jurisdictions apply in the entire site.

(B)An applicant for the reimbursement provisions of this article must submit a fully developed stormwater plan/model demonstrating its compliance with the applicable stormwater ordinance and the plan/model must be certified by the applicable jurisdiction’s stormwater authority.

(C)An applicant for the reimbursement provisions of this chapter shall pay for third party compliance monitoring of stormwater discharges, both water quality and quantity, for twenty years following completion of construction and initial occupancy of retail space. This responsibility remains with the original developer or its assigns for the twenty years and its duty under this requirement may not be assigned or transferred. The third party monitor selected by the developer must be approved by the oversight commission.

(D)Failure to meet stormwater discharges as modeled by the applicant and approved by the applicable jurisdiction results in the loss of the reimbursement provisions set out in this article if so determined by the oversight commission.

(E)The South Carolina Department of Health and Environmental Control shall enforce compliance with subsection (C) with respect to monitoring requirements and as modeled pursuant to subsection (B) with respect to stormwater discharges.

Section 4101030.(A)Subject to the requirements of this article, a municipality may impose exclusively in the proposed designated economic development site a fee on all retailers located in the site not to exceed two percent for not more than twenty years. The fee shall be imposed on the gross proceeds of sales or sales price of all amounts subject to the sales and use tax imposed pursuant to Chapter 36, Title 12, but not the gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 and the gross proceeds of sales of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons, for the purposes provided in Section 4101060 by:

(1)an ordinance adopted by a supermajority of the municipal council which must be at least twothirds of the members of a municipal council. However, if the fee is imposed by ordinance, the fee may not exceed one percent on the gross proceeds of sales or sales price of all amounts subject to the sales and use tax imposed pursuant to Chapter 36, Title 12, but not the gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 and the gross proceeds of sales of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons; or

(2)the approval of a majority of qualified electors voting in a referendum held pursuant to this section called by a majority of the members of the municipal council.

In the case of an imposition by ordinance, the text of the ordinance must contain a detailed statement that the designated economic development site will meet the requirements set forth in Section 4101020(1) before the municipality may pay any infrastructure reimbursement. Regardless of the method of imposition, if the site fails to maintain the requirements set forth in Section 4101020(1), the municipality may include, at the municipal council’s discretion, provisions in the ordinance which may suspend or repeal the fee, or require the owners of the site to refund to the municipality any fee revenues expended on infrastructure within the site on a prorata basis or otherwise, as the council may deem necessary or appropriate.

(B)(1)Upon the adoption of a resolution calling for a referendum by the municipal council, the municipal election commission in each municipality shall conduct a referendum on the first Tuesday ninety days after the adoption of the resolution on the question of implementing the fee within the municipality. The state election laws apply to the referendum, mutatis mutandis. The municipal election commission shall publish the results of the referendum and certify them to the municipal council. The fee must not be imposed in the municipality, unless a majority of the qualified electors voting in the referendum approve the question.

(2)The ballot must read substantially as follows:

‘Must a [one or two] percent fee on the gross proceeds of sales or sales price of all amounts subject to the sales and use tax imposed pursuant to Chapter 36, Title 12, but not the gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 and the gross proceeds of sales of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons, be levied for the purpose of providing funding to defray the cost of infrastructure at the ______designated economic development site, which will invest at least one hundred million dollars, and create at least one thousand two hundred fifty new jobs for at least the first year and shall maintain at least six hundred twentyfive jobs thereafter?

Yes

No’

(3)If the question is not approved at the initial referendum, the municipal council may call for another referendum on the question. However, following the initial referendum, a referendum for this purpose must not be held more often than once in a twentyfour month period on the Tuesday following the first Monday in November in evennumbered years.

(4)Two weeks before the referendum, the municipal council shall publish in a newspaper of general circulation within the jurisdiction a description of and the uses for the fee and a copy of the referendum question.

(C)The imposition date of the fee allowed pursuant to this article is the first day of the first month beginning more than sixty days after the municipality files a certified copy of the imposition ordinance or the certification of the results of the referendum with the South Carolina Department of Revenue.

(D)Once a certified copy of the ordinance or referendum results is filed with the Department of Revenue, for the period of imposition provided in that ordinance or referendum, the department may not accept as filed any additional ordinance or referendum results from the municipality that in any way relates to the fee allowed to be imposed pursuant to this article except an ordinance enacted by a supermajority of the municipal council which must be at least twothirds of the members of a municipal council or results of a referendum conducted with the same requirements set forth in subsection (B) rescinding the existing fee. The Department of Revenue shall accept for filing a certified copy of an ordinance or referendum results rescinding the fee and such rescission shall apply in the manner provided in this section for imposition.

(E)The municipality shall rescind the fee on all, or a portion of, the site upon written petition of all of the property owners in the entire site.

Section 4101040.(A)The fee allowed by this article is an amount not to exceed two percent on the gross proceeds of sales or sales price of all amounts subject to the sales and use tax imposed pursuant to Chapter 36, Title 12, but not the gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 and the gross proceeds of sales of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons.

(B)The fee imposed pursuant to this article must be administered and collected by the Department of Revenue in the same manner that sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the fee.

(C)The fee authorized by this article is in addition to all other state and local sales and use taxes and applies to the gross proceeds of sales in the designated economic development site that is subject to the tax imposed by Chapter 36, Title 12 and the enforcement provisions of Chapter 54, Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36, Title 12 and the gross proceeds of sales of unprepared food that lawfully may be purchased with United States Department of Agriculture food coupons are exempt from the fee imposed by this article. The fee imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36, Title 12.

(D)The provisions of subsections (C), (D), (E), (F), and (G) of Section 410350 apply for fee payors and the fee allowed to be imposed pursuant to this article, including further identification of point of sale jurisdictions, mutatis mutandis.

(E)(1)The revenues of the fee imposed pursuant to this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues and interest quarterly based on point of collection to the treasurer of the municipality in which the fee is imposed and the revenues must be used only for the purposes provided in Section 4101060. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations. However, allocations made as a result of municipal code errors must be corrected prospectively.

(2)Prior to a designated economic development site meeting the criteria set forth in Section 4101020(1), upon receipt of the revenues and interest from the Department of Revenue, the municipality shall deposit the revenue in a separate account. Any interest accrued in the account shall be credited to the account. The municipality may not expend any funds for the reimbursement of infrastructure until the designated economic development site meets the criteria set forth in Section 4101020(1).

Section 4101050.The Department of Revenue shall furnish data to the State Treasurer and to the municipal treasurers receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to municipalities upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 1254240. A person violating this section is subject to the penalties provided in Section 1254240.

Section 4101060.(A)All fee revenues and interest on the fee revenues must be used exclusively for infrastructure located in the designated economic development site from which the fees were collected.

(B)A municipality may treat the fees as revenue from a multicounty park pursuant to Section 13, Article VIII of the South Carolina Constitution, 1895, and Section 41170. The municipality may use the fees as provided in Section 41175 as if such fees were revenues from payment in lieu of taxes, provided that the fees only may be used for the purposes specified in this section.

(C)Fee revenues from a designated economic development site may be used to reimburse an owner of property located in the designated economic development site for its investment in infrastructure only if: (a) the owner shall have actually expended in qualifying infrastructure not less than the amount to be reimbursed, and (b) the Department of Revenue certifies that (i) the items or activities for which the reimbursement is requested qualify as infrastructure as defined in this article, and (ii) the amount actually expended by the owner on eligible infrastructure is accurate and eligible for reimbursement.”

SECTION2.Chapter 10, Title 4 of the 1976 Code is amended by adding:

“Article 11

Alternate Local Option Tourism Development Fee

Section 4101110.This article may be cited as the ‘Alternate Local Option Tourism Development Fee Act’.

Section 4101120.For purposes of this article:

(1)‘County’ means a county in which revenues of the state accommodations tax imposed pursuant to Section 1236920 have aggregated at least five million dollars in a fiscal year and a per capita personal income of at least forty thousand dollars.

(2)‘Fee’ means the local option tourism development fee allowed to be imposed as provided in this article.

(3)‘Municipality’ means a municipal corporation created pursuant to Chapter 1, Title 5 or a municipal government or governing body as the use of the term dictates, located in a county as defined by item (1) of this section.

(4)‘Per capita personal income’ means the latest reported per capita personal income as calculated by the Bureau of Economic Analysis of the United States Department of Commerce.

Section 4101130. (A) Subject to the requirements of this article, a municipality by ordinance may impose in the municipality a fee not to exceed one percent for not more than ten years for the purposes provided in Section 4101160 by the approval of a majority of qualified electors voting in a referendum held pursuant to this section called by a majority of the members of the municipal council.